Don't Fear the Auditor

According to Misselbeck, the income threshold at which people become more likely for audit is likely to decrease to $100,000 from a much higher range. Audits are also more likely for people who are exposed to the alternative minimum tax (AMT) but who do not indicate that they took that tax into account while preparing their returns.

You Have to Like Those Odds

In any case, the odds of an IRS agent banging on the door are minuscule, with a growing percentage of audits conducted through the mail or over the phone.

In data prepared by Syracuse University's Transactional Records Access Clearinghouse, 1% of taxpayers with incomes of over $100,000 faced a correspondence audit in 2004, down from more than 2% in 1992. In 2004, around one-third of 1% of the same group faced an in-depth, face-to-face audit, compared with nearly 3% in 1992.

Taking all individuals into account further reflects the unlikelihood of being audited. In 2004, fewer than two returns out of 1,000 became involved in a face-to-face audit. The average taxpayer had fewer than eight chances in 1,000 of a correspondence audit.

There Goes the Neighborhood

In addition to your income, your address can help determine whether or not you are flagged for auditing. The digital age lets the IRS evaluate a much wider range of factors -- all income levels in a taxpayer's place of residence and the ability to afford living expenses in the neighborhood, for example -- to evaluate the validity of a claim.